-- Private banking loans primarily backed by
marketable securities and commercial loans hit new period-end
highs, while investment management performance was highlighted by
strength of fixed income strategies --
TriState Capital Holdings, Inc. (Nasdaq: TSC) reported third
quarter 2021 financial results, including record net income,
organic loan and balance sheet growth and its fourth consecutive
quarter of net interest margin (NIM) expansion.
The parent company of TriState Capital Bank and Chartwell
Investment Partners reported net income available to common
shareholders of $16.9 million in the third quarter of 2021, up
129.7% from $7.4 million in the third quarter of 2020 and up 7.7%
from $15.7 million in the second quarter of 2021.
The company earned $0.44 per diluted share in the third quarter
of 2021, compared to $0.26 in the third quarter of 2020 and $0.41
in the second quarter of 2021. Third quarter 2021 results include a
higher number of diluted average shares outstanding and a $1.1
million increase in preferred dividends, compared to the year-ago
quarter, both resulting from the company’s December 30, 2020
private placement of $105 million of common stock, convertible
preferred stock and warrants.
“TriState Capital’s performance in the quarter and year to date
showcased the tremendous earnings power of our investment
management, private banking and commercial banking businesses,
along with our ability to sustain profitable and responsible
organic revenue growth,” Chairman and Chief Executive Officer James
F. Getz said. “Our long record of consistent investment in talent
and technology continue to fuel our success in strengthening
relationships with our sophisticated clients, attracting new ones,
and rapidly scaling each of our businesses. Our agile and low-cost
funding capability also enabled TriState Capital to cross the $12
billion-asset milestone during the quarter, as each of our private
banking, middle-market commercial and securities portfolios grew to
new record levels and we maintain a balance sheet that is well
positioned for rising interest rates. We are pleased with our new
business pipelines and dialogue with clients, which we believe will
enable TriState Capital to sustain our momentum in the near term
and accelerate growth over the long term.”
TriState Capital also announced today that it entered into a
definitive agreement with Raymond James Financial, Inc., under
which Raymond James will acquire TriState Capital. The companies
provided additional information on the transaction in a news
release that will be made available at
https://investors.tristatecapitalbank.com.
THIRD QUARTER 2021 HIGHLIGHTS
- Chartwell year-to-date net inflows from retail and
institutional clients totaled $499.0 million, including $149.0
million in fixed income strategies in the third quarter alone.
- Total loans grew by 28.9% from September 30, 2020 and 6.3%
during the quarter.
- Commercial loans grew by 14.7% from September 30, 2020 and 2.7%
during the quarter, led by fund finance solutions and other
commercial and industrial (C&I) lending.
- Private banking loans grew by 39.1% from September 30, 2020 and
8.6% during the quarter, as the company continued to leverage
talent and proprietary technology to fortify its position as the
nation’s leading independent provider of loans collateralized by
marketable securities and other liquid assets.
- Treasury management deposit accounts grew by 82.0% from
September 30, 2020 and 8.2% during the quarter.
- Net interest income (NII) increased by 39.4% from the year-ago
quarter and 8.8% from the linked quarter on continued loan growth
and NIM expansion to 1.65%.
- The company maintained superior credit quality metrics, with
period-end non-performing assets (NPAs) and non-performing loans
(NPLs) declining by 21.4% and 22.8% respectively during the
quarter, while adverse rated credits represented just 0.44% of
total loans at period end.
- Return on average common equity expanded to 10.67%, up 511
basis points from the year-ago period and 30 basis points from the
linked quarter, as the company continues to productively deploy
capital raised in December 2020.
REVENUE GROWTH
NII grew to a record $46.7 million in the third quarter of 2021,
increasing 39.4% from $33.5 million in the year-ago quarter and
8.8% from $42.9 million in the second quarter of 2021. NIM expanded
for the fourth consecutive quarter to 1.65% for the three months
ended September 30, 2021, up from 1.46% in the third quarter of
2020 and 1.63% in the second quarter of 2021.
Non-interest income was $14.2 million in the third quarter of
2021, compared to $16.9 million in the year-ago quarter and $14.8
million in the linked quarter. Chartwell investment management fees
of $9.4 million in the third quarter of 2021 are up 16.6% from $8.1
million in the same period the prior year and remained relatively
consistent with the $9.5 million reported in the linked quarter.
Fees from commercial and private banking clients’ use of TriState
Capital’s interest rate swaps offering totaled $3.1 million in the
third quarter of 2021, $4.0 million in the prior year quarter and
$3.9 million in the linked quarter.
NII and non-interest income, excluding net gains and losses on
the sale of debt securities, combined to generate record total
revenue of $60.9 million for the third quarter of 2021, an increase
of 30.6% from $46.6 million in the year-ago period and 5.6% from
$57.7 million in the linked quarter. Total revenue, which is not a
financial metric under generally accepted accounting principles
(GAAP), is a measure that TriState Capital has consistently
utilized to provide a greater understanding of the diversity and
balance of its income-generating capabilities. Non-interest income
represented 23.3% of total revenue in the third quarter of 2021
when excluding net gains on the sale of securities, compared to
28.2% in the year-ago period and 25.6% in the linked quarter.
EXPENSES REFLECT CONTINUED INVESTMENTS
TriState Capital continues to invest in talent, technology,
products and risk and compliance management to support the
continued responsible growth of its businesses and balance sheet,
to provide a premier client experience, and to scale its efficient
branchless operating model.
Third quarter 2021 non-interest expense of $38.0 million
increased 20.9% from $31.4 million in the year-ago period and 10.4%
from $34.4 million in the linked quarter. TriState Capital
currently expects operating expense growth in the mid teens for
full-year 2021.
TriState Capital Bank’s efficiency ratio for the third quarter
of 2021 was 54.79%, compared to 58.73% in the third quarter of 2020
and 51.51% in the linked quarter. Efficiency ratio is a non-GAAP
financial metric utilized to provide a greater understanding of a
bank’s level of non-interest expense as a percentage of total
revenue.
TriState Capital continued to maintain a low annualized
non-interest expense to average assets ratio of 1.30% in the third
quarter of 2021, compared to 1.31% in the third quarter of 2020 and
1.27% in the linked quarter.
Pre-tax, pre-provision net revenue of $22.9 million in the third
quarter of 2021 increased 50.4% from $15.2 million in the year-ago
period and decreased 1.6% from $23.2 million in the linked quarter.
Pre-tax, pre-provision net revenue is a non-GAAP financial metric
representing net income, without giving effect to loan loss
provision and income taxes, and excluding gains and losses on the
sale and call of investment securities.
Income before tax was $22.9 million in the third quarter of
2021, compared to $11.5 million in the third quarter of 2020 and
$23.2 million in the linked quarter.
TriState Capital’s effective tax rate was 12.6% for the third
quarter, reflecting a $3 million historic tax credit. Expenses
associated with this tax credit are included in other expenses. The
company’s effective tax rate is impacted by certain factors
including the number, timing and size of tax credit investments, as
well as the proportion of consolidated earnings attributed to
investment management. The company’s 2021 effective tax rate, based
on factors including anticipated tax credit investment
opportunities, is currently expected to be in the mid teens.
Net income available to common shareholders and earnings per
share in the third quarter of 2021 are net of $3.1 million in
dividends payable to holders of the company’s Series A, Series B
and Series C Non-Cumulative Perpetual Preferred Stock.
INVESTMENT MANAGEMENT
A combination of investment performance, strong client
relationships and a robust new business effort contributed to
positive net inflows of $499.0 million for the nine months ending
September 30, 2021. In addition, Chartwell’s new business pipeline
currently has in excess of $69 million in commitments from
institutional investors.
Chartwell’s new business and new flows from existing accounts of
$375.0 million was offset by market depreciation of $23.0 million
and outflows of $409.0 million in the third quarter of 2021.
Chartwell’s assets under management (AUM) totaled $11.45 billion on
September 30, 2021, compared to $9.65 billion on September 30, 2020
and $11.51 billion on June 30, 2021.
Reflecting historically low interest rates and the performance
of Chartwell’s investment professionals, its fixed income
strategies attracted net positive inflows of $149.0 million in the
third quarter of 2021. Chartwell fixed income assets grew by 2.6%
during the third quarter to $6.75 billion on September 30, 2021, or
58.9% of total AUM.
Annual run-rate revenue was $39.0 million as of September 30,
2021, compared to $33.6 million on September 30, 2020 and $39.9
million on June 30, 2021. Chartwell’s weighted average fee rate was
0.34% at September 30, 2021. Investment management fee revenue was
$9.4 million in the third quarter of 2021, compared to $8.1 million
in the third quarter of 2020 and $9.5 million in the second quarter
of 2021.
Initiatives to enhance Chartwell profitability continue to be
reflected in the segment’s improving level of expenses relative to
revenue. Investment management fees grew by 18.8%, outpacing a
12.6% increase in Chartwell segment non-interest expense, in the
first nine months of 2021 compared to the same period the prior
year. Year to date, compared to the first nine months of 2020,
Chartwell generated a 138.7% increase in segment net income and a
53.4% increase in segment EBITDA, which is a non-GAAP financial
metric representing net income before interest expense, income tax
expense, depreciation expense and intangible amortization
expense.
ORGANIC LENDING FRANCHISE GROWTH
TriState Capital’s client engagement and distribution
capabilities continued to drive the organic growth of both sides of
its balance sheet by expanding the number and depth of its premier
relationships with high-quality middle-market commercial customers,
as well as expanding the number of high-net-worth clients the bank
serves through its growing national referral network of financial
intermediaries.
Average loans totaled a record $9.43 billion in the third
quarter of 2021, growing 27.6% from $7.39 billion in the prior year
period and 7.0% from $8.81 billion in the linked quarter.
Period-end loans totaled a record $9.87 billion on September 30,
2021, growing $2.21 billion, or 28.9%, from September 30, 2020, and
$586.1 million, or 6.3%, from June 30, 2021.
TriState Capital continued to fortify its position as the
nation’s leading independent provider of marketable
securities-backed loans for clients of independent investment
advisory firms, trust companies, broker-dealers, regional
securities firms, family offices, insurance companies and other
financial intermediaries that do not offer banking services
themselves. Private banking loans totaled a record $6.20 billion at
September 30, 2021, increasing $1.75 billion, or 39.1%, from one
year prior and $490.4 million, or 8.6%, from the end of the linked
quarter.
The company continued to grow relationships with top-quality
middle-market sponsors and businesses, driving originations of
C&I and commercial real estate (CRE) loans while managing
credit quality within the portfolio. Commercial loans totaled $3.67
billion at September 30, 2021, increasing $469.3 million, or 14.7%,
from one year prior and $95.6 million, or 2.7%, from the end of the
linked quarter.
C&I loans grew to $1.34 billion at September 30, 2021,
increasing $202.5 million, or 17.8%, from one year prior and $99.9
million, or 8.1%, from June 30, 2021, led by capital call lines of
credit and other fund finance offerings, more than offsetting
amortization and paydowns. The bank did not participate in the
Paycheck Protection Program (PPP).
CRE loans totaled $2.32 billion at September 30, 2021,
increasing $266.8 million, or 13.0%, from September 30, 2020 and
down $4.3 million, or 0.2%, from June 30, 2021 as new production
activity was offset by amortization and paydowns in the third
quarter.
STRATEGIC DEPOSIT AND LIQUIDITY MANAGEMENT FRANCHISE
EXPANSION
TriState Capital continues to deliver growth on its agile
liquidity management franchise, which creates meaningful
service-based client relationships and provides highly responsive
funding. The bank is winning new business and enhancing the breadth
and depth of existing client relationships with its nationally
distributed service and liquidity management offerings for
financial services businesses, payroll and other specialized
payment servicers, real estate firms, high-net-worth individuals,
family offices, middle market companies, municipalities and
non-profits.
Average deposits totaled a record $10.25 billion in the third
quarter of 2021, growing 25.0% from $8.21 billion in the third
quarter of last year and 7.3% from $9.56 billion in the linked
quarter. Period-end deposits totaled a record $10.76 billion at
September 30, 2021, growing $2.57 billion, or 31.4%, from September
30, 2020, and $564.7 million, or 5.5%, from June 30, 2021.
Treasury management deposit accounts totaled $2.45 billion at
September 30, 2021, increasing $1.10 billion, or 82.0%, from
September 30, 2020 and $186.8 million, or 8.2%, from June 30,
2021.
The bank’s loan-to-deposit ratio at September 30, 2021 was
91.75%, compared to 93.53% at September 30, 2020 and 91.09% at June
30, 2021, reflecting the bank’s ability to manage liquidity levels
in line with deployment opportunities.
INTEREST RATE MANAGEMENT
TriState Capital continues to maintain a balance sheet with
significant flexibility to manage interest rate dynamics, while
offering attractive deposit and loan pricing to clients.
Ultimately, the bank favors an asset-sensitive approach over the
long term.
Investment securities totaled a record $1.43 billion at
September 30, 2021, up 74.3% from September 30, 2020 and 6.9% from
June 30, 2021 as the bank continued to build on-balance sheet
liquidity.
Approximately 60% of TriState Capital’s non-fixed rate deposits
use the Effective Fed Funds Rate or another benchmark as reference
points, and the remaining non-fixed rate deposits are priced at
rates set with bank discretion. Total cost of funds for all
deposits and interest-bearing liabilities averaged 0.49% during the
third quarter of 2021, compared to 0.77% in the same period last
year and 0.51% in the linked quarter. The total cost of deposits
averaged 0.41% during the third quarter of 2021, compared to 0.67%
in the same period last year and 0.42% in the linked quarter.
At September 30, 2021, 95% of the bank’s loans were floating
rate and indexed to 30-day LIBOR or the Prime Rate. TriState
Capital continued to constructively use interest rate floors on
existing and new variable rate loans throughout the third quarter
of 2021.
The yield on total loans averaged 2.32% during the third quarter
of 2021, compared to 2.49% in the prior year period and 2.35% in
the linked quarter. Loan yields resulted primarily from trends in
30-day LIBOR, which declined on average less than 1 basis point
during the third quarter of 2021. Loan yields were also affected by
higher rates of growth in balances of private bank loans relative
to commercial bank loans. Loan yield movement was offset by a
continued reduction in deposit costs.
NIM expanded for the fourth consecutive quarter to 1.65% for the
third quarter of 2021, up 19 basis points from the same period the
year prior and 2 basis points from the linked quarter.
ASSET QUALITY
TriState Capital maintained strong asset quality metrics in the
third quarter of 2021, reflecting its disciplined credit culture
and lower risk profile resulting from the majority of its loans
consisting of private banking non-purpose margin loans
collateralized by marketable securities. Private banking grew to
represent 62.9% of the total loan portfolio at September 30, 2021,
while CRE and C&I comprised 23.5% and 13.6% of total loans,
respectively.
COVID-19 deferral levels continued to decline in line with
expectations to two loans representing $18.8 million or 0.2% of
total loans on September 30, 2021, from four loans representing
$41.0 million or 0.4% of total loans on June 30, 2021.
The allowance for credit losses on loans and leases (ACL) was
$32.4 million at September 30, 2021, compared to $30.7 million at
September 30, 2020 and $32.6 million at June 30, 2021. ACL on
commercial loans represented 0.82% of commercial loans at period
end, excluding private banking loans primarily collateralized by
liquid, marketable securities that do not require a reserve,
compared to 0.89% at September 30, 2020 and 0.85% at June 30, 2021.
As a percentage of total loans, ACL was 0.33% at September 30,
2021, 0.40% at September 30, 2020 and 0.35% at June 30, 2021.
TriState Capital’s net charge offs (NCOs) were $238,000 in the
third quarter of 2021, or 0.01% of total average loans of $9.43
billion. NCOs were $0 in the year-ago quarter and $2.3 million in
the linked quarter.
During the third quarter of 2021, NPAs and NPLs declined by
21.4% and 22.8%, respectively, from June 30, 2021 to September 30,
2021.
NPAs were $10.8 million, or 0.09% of total assets, at September
30, 2021, compared to $9.5 million, or 0.10%, at September 30, 2020
and $13.7 million, or 0.12%, at June 30, 2021. NPLs were $8.6
million, or 0.09% of total loans, at September 30, 2021, compared
to $6.8 million, or 0.09%, at September 30, 2020 and $11.2 million,
or 0.12%, at June 30, 2021.
Total adverse-rated credits, including NPLs, were $43.5 million,
or 0.44% of total loans, at September 30, 2021, compared to $38.8
million, or 0.51%, at September 30, 2020 and $34.1 million, or
0.37%, at June 30, 2021. TriState Capital maintains a very low
ratio of criticized assets to total loans that was more than 10
times lower than the 4.41% most-recent quarter median for publicly
traded commercial banks with assets of $10 billion to $20 billion,
according to data from S&P Capital IQ.
TriState Capital’s provision for credit losses was de minimis in
the third quarter of 2021, $7.4 million in the third quarter of
2020 and $96,000 in the linked quarter.
CAPITAL STRENGTH AND EFFICIENCY
The company’s strong balance sheet included $1.90 billion in
cash, equivalents and securities at September 30, 2021. Cash,
equivalents, securities and private banking loans -- which are
primarily collateralized by marketable securities that are
monitored daily, liquid and subject to favorable treatment under
regulatory capital requirements -- represented 66.65% of total
assets at the end of the third quarter of 2021.
As of September 30, 2021, estimated regulatory capital ratios
for TriState Capital Holdings were 13.71% for total risk-based
capital, 11.79% for tier 1 risk-based capital, 9.01% for common
equity tier 1 risk-based capital, and 6.61% for tier 1 leverage.
For TriState Capital Bank, the estimated capital ratios were 13.38%
for total risk-based capital, 12.94% for tier 1 risk-based capital,
12.94% for common equity tier 1 risk-based capital, and 7.24% for
tier 1 leverage.
TriState Capital had $9.8 million of common stock repurchase
authority available at September 30, 2021 under previously
disclosed buyback programs authorized by its Board of Directors.
Since the Board first authorized share buybacks in 2014, the
company has repurchased a total of 2.1 million shares for
approximately $33.0 million at an average cost of $15.39 per share.
The company has not repurchased shares on the open market since the
second quarter of 2020.
CONFERENCE CALL
As previously announced, TriState Capital will hold an investor
conference call tomorrow. The live conference call on October 21
will be held at 8:30 a.m. ET. Telephone participants may avoid any
delays by pre-registering for the call using the link
https://dpregister.com/sreg/10160497/edacb54f34 to receive a
special dial-in number and PIN. Telephone participants who are
unable to pre-register should dial in at least 10 minutes prior to
the call and request the “TriState Capital investor call.” The call
may be accessed by dialing 888-339-0757 from the United States or
Canada, and 412-902-4194 from other international locations.
The live conference call will also be available through an audio
webcast accessible at https://events.q4inc.com/attendee/650246783
or https://investors.tristatecapitalbank.com. These links may also
be used to access an archived replay of the conference call.
A telephone replay of the call will be available approximately
one hour after the end of the conference through October 28. The
replay may be accessed by dialing 877-344-7529 from the United
States, 855-669-9658 from Canada, or 412-317-0088 from other
international locations, and entering the conference number
10160497.
ABOUT TRISTATE CAPITAL
TriState Capital Holdings, Inc. (Nasdaq: TSC) is a bank holding
company headquartered in Pittsburgh, Pa., providing commercial
banking, private banking and investment management services to
middle-market companies, institutional clients and high-net-worth
individuals. Its TriState Capital Bank subsidiary had $12.07
billion in assets as of September 30, 2021, and serves
middle-market commercial customers through regional representative
offices in Pittsburgh, Philadelphia, Cleveland, Edison, N.J., and
New York City, as well as high-net-worth individuals nationwide
through its national referral network of financial intermediaries.
Its Chartwell Investment Partners subsidiary had $11.45 billion in
assets under management as of September 30, 2021, and serves
institutional clients and TriState Capital’s financial intermediary
network. For more information, please visit
http://investors.tristatecapitalbank.com.
FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements reflect TriState
Capital’s current views with respect to, among other things, future
events and the company’s financial performance, as well as the
company’s goals and objectives for future operations, financial and
business trends, business prospects and management’s outlook or
expectations for earnings, revenues, expenses, capital levels,
liquidity levels, asset quality or other measures of future
financial or business performance, strategies or expectations.
These statements are often, but not always, made through the use of
words or phrases such as “achieve,” “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “goal,” “intend,”
“maintain,” “may,” “opportunity,” “outlook,” “plan,” “potential,”
“predict,” “projection,” “seek,” “should,” “sustain,” “target,”
“trend,” “will,” “will likely result,” and “would,” or the negative
versions of those words or other comparable statements of a future
or forward-looking nature. These forward-looking statements are not
historical facts, and are based on current expectations, estimates
and projections about TriState Capital’s industry and beliefs or
assumptions made by management, many of which, by their nature, are
inherently uncertain. Although TriState Capital believes that the
expectations reflected in these forward-looking statements are
reasonable as of the date made, actual results may prove to be
materially different from the results expressed or implied by the
forward-looking statements. Accordingly, TriState Capital cautions
you that any such forward-looking statements are not guarantees of
future performance and are subject to risks, assumptions and
uncertainties that change over time and are difficult to predict,
including, but not limited to, the following:
- risks associated with the COVID-19 pandemic and their expected
impact and duration, including effects on TriState Capital’s
operations, its clients, economic conditions and the demand for its
products and services;
- TriState Capital’s ability to prudently manage its growth and
execute its strategy, including the successful integration of past
and future acquisitions, its ability to fully realize the cost
savings and other benefits of its acquisitions, manage risks
related to business disruption following those acquisitions, and
manage customer disintermediation;
- deterioration of TriState Capital’s asset quality;
- TriState Capital’s level of non-performing assets and the costs
associated with resolving problem loans, including litigation and
other costs;
- possible additional loan and lease losses and impairment,
changes in the value of collateral securing TriState Capital’s
loans and leases and the collectability of loans and leases,
particularly as a result of the COVID-19 pandemic and the programs
implemented by the Coronavirus Aid, Relief, and Economic Security
Act, including its automatic loan forbearance provisions;
- possible changes in the speed of loan prepayments by customers
and loan origination or sales volumes;
- business and economic conditions generally and in the financial
services industry, nationally and within TriState Capital’s local
market areas, including the effects of an increase in unemployment
levels, slowdowns in economic growth and changes in demand for
products or services or the value of assets under management;
- TriState Capital’s ability to maintain important deposit
customer relationships, its reputation and otherwise avoid
liquidity risks;
- changes in management personnel;
- TriState Capital’s ability to recruit and retain key
employees;
- volatility and direction of interest rates;
- risks related to the phasing out of LIBOR and changes in the
manner of calculating reference rates, as well as the impact of the
phase out of LIBOR and introduction of alternative reference rates
on the value of loans and other financial instruments that are
linked to LIBOR;
- changes in accounting policies, accounting standards, or
authoritative accounting guidance, including the CECL model;
- any impairment of TriState Capital’s goodwill or other
intangible assets;
- TriState Capital’s ability to develop and provide competitive
products and services that appeal to its customers and target
markets;
- TriState Capital’s ability to provide investment management
performance competitive with its peers and benchmarks;
- fluctuations in the carrying value of the assets under
management held by Chartwell, as well as the relative and absolute
investment performance of such subsidiary’s investment
products;
- operational risks associated with TriState Capital’s business,
including technology and cyber-security related risks;
- increased competition in the financial services industry,
particularly from regional and national institutions;
- negative perceptions or publicity with respect to any products
or services offered by TriState Capital;
- adverse judgments or other resolution of pending and future
legal proceedings, and costs incurred in defending such
proceedings;
- changes in the laws, rules, regulations, interpretations or
policies relating to financial institutions, accounting, tax,
trade, monetary and fiscal matters, including economic stimulus
programs, and potential expenses associated with complying with
such laws and regulations;
- TriState Capital’s ability to comply with applicable capital
and liquidity requirements, including its ability to generate
liquidity internally or raise capital on favorable terms;
- regulatory limits on TriState Capital’s ability to receive
dividends from its subsidiaries and pay dividends to
shareholders;
- changes and direction of government policy towards and
intervention in the U.S. financial system;
- natural disasters and adverse weather, acts of terrorism,
regional or national civil unrest, cyber-attacks, an outbreak of
hostilities, a public health outbreak (such as COVID-19) or other
international or domestic calamities, and other matters beyond
TriState Capital’s control;
- the effects of any reputation, credit, interest rate, market,
operational, legal, liquidity, regulatory or compliance risk
resulting from developments related to any of the risks discussed
above; and
- other factors that are discussed in TriState Capital’s filings
with the Securities and Exchange Commission.
The foregoing factors should not be construed as exhaustive and
should be read together with the other cautionary statements
included in this press release. If one or more events related to
these or other risks or uncertainties materialize, or if TriState
Capital’s underlying assumptions prove to be incorrect, actual
results may differ materially from what the company anticipates.
Accordingly, readers should not place undue reliance on any such
forward-looking statements. New factors emerge from time to time,
and it is not possible for TriState Capital to predict which will
arise. Any forward-looking statement speaks only as of the date on
which it is made, and TriState Capital does not undertake any
obligation to update or review any forward-looking statement,
whether as a result of new information, future developments or
otherwise. In addition, TriState Capital cannot assess the impact
of each factor on its business or the extent to which any factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statements.
NON-GAAP FINANCIAL DISCLOSURES
This news release and the accompanying tables contain certain
financial information determined by methods other than in
accordance with U.S. generally accepted accounting principles
(GAAP). Specifically, TriState Capital reviews and reports tangible
common equity, tangible book value per common share, EBITDA, total
revenue, pre-tax, pre-provision net revenue and efficiency ratio.
Although TriState Capital believes these non-GAAP financial
measures provide a greater understanding of its business, these
measures are not necessarily comparable to similar measures that
may be presented by other companies. These disclosures should not
be viewed as a substitute for financial measures determined in
accordance with GAAP. Where non-GAAP disclosures are used, the most
directly comparable GAAP financial measure, as well as the
reconciliation to the comparable GAAP financial measure, can be
found within this news release and in the reconciliation tables
accompanying this news release.
TRISTATE CAPITAL HOLDINGS, INC. BALANCE SHEET DATA
(UNAUDITED)
As of
September 30,
June 30,
September 30,
(Dollars in thousands)
2021
2021
2020
Cash and cash equivalents
$
469,932
$
529,453
$
608,302
Total investment securities
1,429,613
1,337,658
820,223
Loans and leases held-for-investment
9,869,011
9,282,922
7,654,446
Allowance for credit losses on loans and
leases
(32,363)
(32,577)
(30,706)
Loans and leases held-for-investment,
net
9,836,648
9,250,345
7,623,740
Goodwill and other intangibles, net
62,478
62,955
64,389
Other assets
360,197
360,761
377,136
Total assets
$
12,158,868
$
11,541,172
$
9,493,790
Deposits
$
10,756,141
$
10,191,433
$
8,183,713
Borrowings, net
355,654
345,600
395,439
Other liabilities
233,035
209,571
271,438
Total liabilities
11,344,830
10,746,604
8,850,590
Preferred stock
180,443
179,343
116,079
Common shareholders’ equity
633,595
615,225
527,121
Total shareholders’ equity
814,038
794,568
643,200
Total liabilities and shareholders’
equity
$
12,158,868
$
11,541,172
$
9,493,790
TRISTATE CAPITAL HOLDINGS, INC. INCOME STATEMENT DATA
(UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands)
2021
2021
2020
2021
2020
Interest income:
Loans and leases
$
55,071
$
51,702
$
46,256
$
155,959
$
152,551
Investments
4,477
3,737
3,687
10,860
11,528
Interest-earning deposits
157
116
279
433
2,006
Total interest income
59,705
55,555
50,222
167,252
166,085
Interest expense:
Deposits
10,480
10,106
13,898
31,340
57,095
Borrowings
2,558
2,537
2,850
7,677
7,110
Total interest expense
13,038
12,643
16,748
39,017
64,205
Net interest income
46,667
42,912
33,474
128,235
101,880
Provision for credit losses
—
96
7,430
320
16,428
Net interest income after provision for
credit losses
46,667
42,816
26,044
127,915
85,452
Non-interest income:
Investment management fees
9,436
9,451
8,095
27,887
23,471
Service charges on deposits
377
325
235
1,018
763
Net gain on the sale and call of debt
securities
33
98
3,744
130
3,815
Swap fees
3,059
3,913
3,953
9,683
12,179
Commitment and other loan fees
740
564
381
1,630
1,262
Bank owned life insurance income
613
480
441
1,522
1,298
Other income (loss)
(28)
13
40
855
414
Total non-interest income
14,230
14,844
16,889
42,725
43,202
Non-interest expense:
Compensation and employee benefits
21,701
20,937
18,524
62,559
52,539
Premises and equipment expense
1,520
1,173
1,488
4,099
4,389
Professional fees
2,310
2,124
1,596
5,758
4,175
FDIC insurance expense
1,375
1,125
3,030
3,625
7,760
General insurance expense
363
341
294
1,002
834
State capital shares tax expense
790
777
366
2,217
1,115
Travel and entertainment expense
755
639
592
1,835
1,735
Technology and data services
4,274
3,687
2,576
11,061
7,294
Intangible amortization expense
477
478
478
1,433
1,466
Marketing and advertising
984
898
394
2,566
1,694
Other operating expenses
3,459
2,246
2,089
7,556
5,667
Total non-interest expense
38,008
34,425
31,427
103,711
88,668
Income before tax
22,889
23,235
11,506
66,929
39,986
Income tax expense
2,873
4,455
2,177
11,933
7,362
Net income
$
20,016
$
18,780
$
9,329
$
54,996
$
32,624
Preferred stock dividends
3,097
3,077
1,962
9,233
5,886
Net income available to common
shareholders
$
16,919
$
15,703
$
7,367
$
45,763
$
26,738
TRISTATE CAPITAL HOLDINGS, INC. SELECTED FINANCIAL HIGHLIGHTS
(UNAUDITED)
As of and For the
Three Months Ended
As of and For the
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands, except per share
data)
2021
2021
2020
2021
2020
Per share and share data:
Earnings per common share:
Basic
$
0.46
$
0.42
$
0.26
$
1.24
$
0.95
Diluted
$
0.44
$
0.41
$
0.26
$
1.20
$
0.93
Book value per common share
$
19.11
$
18.54
$
17.67
$
19.11
$
17.67
Tangible book value per common share
(1)
$
17.23
$
16.65
$
15.51
$
17.23
$
15.51
Common shares outstanding, at end of
period
33,154,343
33,176,934
29,828,143
33,154,343
29,828,143
Weighted average common shares
outstanding:
Basic
31,357,356
31,280,481
28,286,250
31,287,924
28,230,180
Diluted
32,146,222
32,147,758
28,674,443
32,316,867
28,679,283
Performance ratios:
Return on average assets (2)
0.68
%
0.69
%
0.39
%
0.67
%
0.49
%
Return on average common equity (2)
10.67
%
10.37
%
5.56
%
10.06
%
6.90
%
Net interest margin (2) (3)
1.65
%
1.63
%
1.46
%
1.63
%
1.60
%
Total revenue (1)
$
60,864
$
57,658
$
46,619
$
170,830
$
141,267
Pre-tax, pre-provision net revenue (1)
$
22,856
$
23,233
$
15,192
$
67,119
$
52,599
Bank efficiency ratio (1)
54.79
%
51.51
%
58.73
%
52.41
%
53.66
%
Non-interest expense to average assets
(2)
1.30
%
1.27
%
1.31
%
1.27
%
1.33
%
Asset quality:
Non-performing loans
$
8,625
$
11,175
$
6,754
$
8,625
$
6,754
Non-performing assets
$
10,803
$
13,743
$
9,478
$
10,803
$
9,478
Other real estate owned
$
2,178
$
2,568
$
2,724
$
2,178
$
2,724
Non-performing assets to total assets
0.09
%
0.12
%
0.10
%
0.09
%
0.10
%
Non-performing loans to total loans
0.09
%
0.12
%
0.09
%
0.09
%
0.09
%
ACL to loans and leases
0.33
%
0.35
%
0.40
%
0.33
%
0.40
%
ACL to non-performing loans
375.22
%
291.52
%
454.63
%
375.22
%
454.63
%
Net charge-offs (recoveries)
$
238
$
2,253
$
—
$
2,690
$
(170)
Net charge-offs to average total loans
(2)
0.01
%
0.10
%
—
%
0.04
%
—
%
Capital ratios: (4)
Tier 1 leverage ratio
6.61
%
6.86
%
6.23
%
6.61
%
6.23
%
Common equity tier 1 risk-based capital
ratio
9.01
%
9.06
%
8.48
%
9.01
%
8.48
%
Tier 1 risk-based capital ratio
11.79
%
11.94
%
10.56
%
11.79
%
10.56
%
Total risk-based capital ratio
13.71
%
13.94
%
12.85
%
13.71
%
12.85
%
Bank tier 1 leverage ratio
7.24
%
7.34
%
7.00
%
7.24
%
7.00
%
Bank common equity tier 1 risk-based
capital ratio
12.94
%
12.80
%
11.89
%
12.94
%
11.89
%
Bank tier 1 risk based capital ratio
12.94
%
12.80
%
11.89
%
12.94
%
11.89
%
Bank total risk-based capital ratio
13.38
%
13.26
%
12.46
%
13.38
%
12.46
%
Investment Management Segment:
Assets under management
$
11,454,000
$
11,511,000
$
9,653,000
$
11,454,000
$
9,653,000
EBITDA (1)
$
1,847
$
2,063
$
1,551
$
5,826
$
3,799
(1)
These measures are not measures recognized
under GAAP and are therefore considered to be non-GAAP financial
measures. See “Non-GAAP Financial Measures” for a
reconciliation of these measures to their most directly comparable
GAAP measures.
(2)
Ratios are annualized.
(3)
Net interest margin is calculated on a
fully taxable equivalent basis.
(4)
Capital ratios are estimated until
regulatory reports are filed.
TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS
(UNAUDITED)
Three Months Ended
September 30, 2021
June 30, 2021
September 30, 2020
(Dollars in thousands)
Average Balance
Interest Income (1)/ Expense
Average Yield/ Rate (2)
Average Balance
Interest Income (1)/ Expense
Average Yield/ Rate (2)
Average Balance
Interest Income (1)/ Expense
Average Yield/ Rate (2)
Assets
Interest-earning deposits
$
429,806
$
155
0.14
%
$
407,627
$
114
0.11
%
$
866,502
$
278
0.13
%
Federal funds sold
12,629
2
0.06
%
11,502
2
0.07
%
9,071
2
0.09
%
Debt securities available-for-sale
415,855
1,664
1.59
%
266,264
886
1.33
%
561,378
1,804
1.28
%
Debt securities held-to-maturity
943,733
2,686
1.13
%
1,040,658
2,705
1.04
%
262,128
1,701
2.58
%
Equity securities
163
—
—
%
—
—
—
%
—
—
—
%
FHLB stock
11,932
137
4.56
%
11,776
154
5.25
%
13,284
196
5.87
%
Total loans and leases
9,427,370
55,071
2.32
%
8,808,775
51,702
2.35
%
7,386,265
46,256
2.49
%
Total interest-earning assets
11,241,488
59,715
2.11
%
10,546,602
55,563
2.11
%
9,098,628
50,237
2.20
%
Other assets
382,763
347,923
420,887
Total assets
$
11,624,251
$
10,894,525
$
9,519,515
Liabilities and Shareholders’
Equity
Interest-bearing deposits:
Interest-bearing checking accounts
$
3,946,028
$
3,682
0.37
%
$
3,852,078
$
3,214
0.33
%
$
2,866,303
$
3,280
0.46
%
Money market deposit accounts
4,879,971
5,794
0.47
%
4,316,946
5,636
0.52
%
3,811,100
6,944
0.72
%
Certificates of deposit
899,855
1,004
0.44
%
929,906
1,256
0.54
%
1,121,824
3,674
1.30
%
Borrowings:
FHLB borrowings
250,815
1,102
1.74
%
250,000
1,082
1.74
%
300,000
1,392
1.85
%
Line of credit borrowings
761
—
—
%
—
—
—
%
—
—
—
%
Subordinated notes payable, net
95,619
1,456
6.04
%
95,565
1,455
6.11
%
95,601
1,458
6.07
%
Total interest-bearing liabilities
10,073,049
13,038
0.51
%
9,444,495
12,643
0.54
%
8,194,828
16,748
0.81
%
Noninterest-bearing deposits
528,897
460,601
407,079
Other liabilities
213,552
203,033
274,480
Shareholders’ equity
808,753
786,396
643,128
Total liabilities and shareholders’
equity
$
11,624,251
$
10,894,525
$
9,519,515
Net interest income (1)
$
46,677
$
42,920
$
33,489
Net interest spread (1)
1.60
%
1.57
%
1.39
%
Net interest margin (1)
1.65
%
1.63
%
1.46
%
(1)
Interest income and net interest margin
are calculated on a fully taxable equivalent basis..
(2)
Annualized.
TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS
(UNAUDITED)
Nine Months Ended September
30,
2021
2020
(Dollars in thousands)
Average Balance
Interest Income (1)/ Expense
Average Yield/ Rate (2)
Average Balance
Interest Income (1)/ Expense
Average Yield/ Rate (2)
Assets
Interest-earning deposits
$
463,827
$
427
0.12
%
$
809,978
$
1,983
0.33
%
Federal funds sold
11,570
6
0.07
%
8,022
23
0.38
%
Debt securities available-for-sale
343,897
3,120
1.21
%
391,377
5,874
2.00
%
Debt securities held-to-maturity
875,157
7,291
1.11
%
252,296
4,805
2.54
%
Debt securities trading
104
1
1.29
%
76
1
1.76
%
Equity securities
55
—
—
%
—
—
—
%
FHLB stock
11,754
473
5.38
%
15,569
899
7.71
%
Total loans and leases
8,841,619
155,959
2.36
%
7,052,457
152,551
2.89
%
Total interest-earning assets
10,547,983
167,277
2.12
%
8,529,775
166,136
2.60
%
Other assets
368,728
380,908
Total assets
$
10,916,711
$
8,910,683
Liabilities and Shareholders’
Equity
Interest-bearing deposits:
Interest-bearing checking accounts
$
3,624,587
$
9,689
0.36
%
$
2,224,827
$
11,213
0.67
%
Money market deposit accounts
4,516,081
17,395
0.51
%
3,740,968
28,975
1.03
%
Certificates of deposit
947,127
4,256
0.60
%
1,297,637
16,907
1.74
%
Borrowings:
FHLB borrowings
251,557
3,256
1.73
%
340,493
4,711
1.85
%
Line of credit borrowings
1,769
55
4.16
%
8,047
261
4.33
%
Subordinated notes payable, net
95,565
4,366
6.11
%
46,851
2,138
6.10
%
Total interest-bearing liabilities
9,436,686
39,017
0.55
%
7,658,823
64,205
1.12
%
Noninterest-bearing deposits
471,727
391,689
Other liabilities
221,290
226,838
Shareholders’ equity
787,008
633,333
Total liabilities and shareholders’
equity
$
10,916,711
$
8,910,683
Net interest income (1)
$
128,260
$
101,931
Net interest spread (1)
1.57
%
1.48
%
Net interest margin (1)
1.63
%
1.60
%
(1)
Interest income and net interest margin
are calculated on a fully taxable equivalent basis.
(2)
Annualized.
TRISTATE CAPITAL HOLDINGS, INC. LOAN AND LEASE COMPOSITION
(UNAUDITED)
September 30, 2021
June 30, 2021
September 30, 2020
(Dollars in thousands)
Loan
Balance
Percent of Total Loans
Loan
Balance
Percent of Total Loans
Loan
Balance
Percent of Total Loans
Private banking loans
$
6,204,009
62.9
%
$
5,713,562
61.5
%
$
4,458,767
58.3
%
Middle-market banking loans:
Commercial and industrial
1,340,817
13.6
%
1,240,917
13.4
%
1,138,288
14.9
%
Commercial real estate
2,324,185
23.5
%
2,328,443
25.1
%
2,057,391
26.8
%
Total middle-market banking loans
3,665,002
37.1
%
3,569,360
38.5
%
3,195,679
41.7
%
Loans and leases held-for-investment
$
9,869,011
100.0
%
$
9,282,922
100.0
%
$
7,654,446
100.0
%
TRISTATE CAPITAL HOLDINGS, INC. STATEMENT OF INCOME BY
REPORTABLE SEGMENT (UNAUDITED)
Three Months Ended September 30,
2021
Three Months Ended September 30,
2020
(Dollars in thousands)
Bank
Investment Management
Parent and Other
Consolidated
Bank
Investment Management
Parent and Other
Consolidated
Income statement data:
Interest income
$
59,705
$
—
$
—
$
59,705
$
50,222
$
—
$
—
$
50,222
Interest expense
11,591
—
1,447
13,038
15,297
—
1,451
16,748
Net interest income (loss)
48,114
—
(1,447)
46,667
34,925
—
(1,451)
33,474
Provision for credit losses
—
—
—
—
7,430
—
—
7,430
Net interest income (loss) after provision
for credit losses
48,114
—
(1,447)
46,667
27,495
—
(1,451)
26,044
Non-interest income:
Investment management fees
—
9,780
(344)
9,436
—
8,293
(198)
8,095
Net gain on the sale and call of debt
securities
33
—
—
33
3,744
—
—
3,744
Other non-interest income (loss)
4,768
(7)
—
4,761
5,027
23
—
5,050
Total non-interest income (loss)
4,801
9,773
(344)
14,230
8,771
8,316
(198)
16,889
Non-interest expense:
Intangible amortization expense
—
477
—
477
—
478
—
478
Other non-interest expense
28,975
8,031
525
37,531
23,462
6,868
619
30,949
Total non-interest expense
28,975
8,508
525
38,008
23,462
7,346
619
31,427
Income (loss) before tax
23,940
1,265
(2,316)
22,889
12,804
970
(2,268)
11,506
Income tax expense (benefit)
2,719
(412)
566
2,873
2,357
251
(431)
2,177
Net income (loss)
$
21,221
$
1,677
$
(2,882)
$
20,016
$
10,447
$
719
$
(1,837)
$
9,329
Nine Months Ended September 30,
2021
Nine Months Ended September 30,
2020
(Dollars in thousands)
Bank
Investment Management
Parent and Other
Consolidated
Bank
Investment Management
Parent and Other
Consolidated
Income statement data:
Interest income
$
167,252
$
—
$
—
$
167,252
$
166,085
$
—
$
—
$
166,085
Interest expense
34,629
—
4,388
39,017
61,844
—
2,361
64,205
Net interest income (loss)
132,623
—
(4,388)
128,235
104,241
—
(2,361)
101,880
Provision for credit losses
320
—
—
320
16,428
—
—
16,428
Net interest income (loss) after provision
for credit losses
132,303
—
(4,388)
127,915
87,813
—
(2,361)
85,452
Non-interest income:
Investment management fees
—
28,789
(902)
27,887
—
23,955
(484)
23,471
Net gain on the sale and call of debt
securities
130
—
—
130
3,815
—
—
3,815
Other non-interest income
14,683
25
—
14,708
15,893
23
—
15,916
Total non-interest income (loss)
14,813
28,814
(902)
42,725
19,708
23,978
(484)
43,202
Non-interest expense:
Intangible amortization expense
—
1,433
—
1,433
—
1,466
—
1,466
Other non-interest expense
77,201
23,300
1,777
102,278
64,462
20,498
2,242
87,202
Total non-interest expense
77,201
24,733
1,777
103,711
64,462
21,964
2,242
88,668
Income (loss) before tax
69,915
4,081
(7,067)
66,929
43,059
2,014
(5,087)
39,986
Income tax expense (benefit)
12,013
183
(263)
11,933
7,878
381
(897)
7,362
Net income (loss)
$
57,902
$
3,898
$
(6,804)
$
54,996
$
35,181
$
1,633
$
(4,190)
$
32,624
TRISTATE CAPITAL HOLDINGS, INC. EARNINGS PER COMMON SHARE
(UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands, except per share
data)
2021
2021
2020
2021
2020
Basic earnings per common
share:
Net income
$
20,016
$
18,780
$
9,329
$
54,996
$
32,624
Less: Preferred dividends on Series A and
Series B
1,963
1,962
1,962
5,887
5,886
Less: Preferred dividends on Series C
1,134
1,115
—
3,346
—
Net income available to common
shareholders
$
16,919
$
15,703
$
7,367
$
45,763
$
26,738
Allocation of net income available:
Common shareholders
$
14,274
$
13,272
$
7,367
$
38,679
$
26,738
Series C convertible preferred
shareholders
2,225
2,040
—
5,944
—
Warrant shareholders
420
391
—
1,140
—
Total
$
16,919
$
15,703
$
7,367
$
45,763
$
26,738
Basic weighted average common shares
outstanding:
Basic common shares
31,357,356
31,280,481
28,286,250
31,287,924
28,230,180
Series C convertible preferred stock,
as-if converted
4,887,272
4,807,272
—
4,807,858
—
Warrants, as-if exercised
922,438
922,438
—
922,438
—
Basic earnings per common share
$
0.46
$
0.42
$
0.26
$
1.24
$
0.95
Diluted earnings per common
share:
Income available to common shareholders
after allocation
$
14,274
$
13,272
$
7,367
$
38,679
$
26,738
Diluted weighted average common shares
outstanding:
Basic common shares
31,357,356
31,280,481
28,286,250
31,287,924
28,230,180
Restricted stock - dilutive
664,729
719,504
303,138
884,714
313,726
Stock options - dilutive
124,137
147,773
85,055
144,229
135,377
Diluted common shares
32,146,222
32,147,758
28,674,443
32,316,867
28,679,283
Diluted earnings per common share
$
0.44
$
0.41
$
0.26
$
1.20
$
0.93
September 30,
June 30,
September 30,
September 30,
September 30,
2021
2021
2020
2021
2020
Anti-dilutive shares:
Restricted stock
10,750
10,750
785,762
11,500
566,498
Stock options
—
—
5,500
—
—
Series C convertible preferred stock,
as-if converted
4,887,272
4,807,272
—
4,887,272
—
Warrants, as-if exercised
922,438
922,438
—
922,438
—
Total anti-dilutive shares
5,820,460
5,740,460
791,262
5,821,210
566,498
Earnings per common share (“EPS”) is computed using the
two-class method, which requires that the Series C convertible
preferred stock and warrants to be treated as participating classes
of securities in the computation of EPS. In addition, net income is
reduced by dividends declared on all series of preferred stock to
derive net income available to common shareholders. The two-class
method is an earnings allocation that determines EPS for each class
of common stock and participating security. Net income available to
common shareholders is reduced by the percentage of average common
shares allocable to Series C convertible preferred holders and
warrant holders on an as-if converted basis to arrive at net income
allocable to common shareholders. Basic EPS is computed by dividing
net income allocable to common shareholders by the weighted average
number of its common shares outstanding for the period, excluding
non-vested restricted stock. Diluted EPS reflects the potential
dilution upon the exercise of stock options and warrants, and the
vesting of restricted stock awards granted utilizing the treasury
stock method. The Series C convertible preferred stock is excluded
from diluted weighted average common shares outstanding because the
payment of the dividend is considered in the net income allocable
to common shareholders for the calculation of basic EPS.
TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL
MEASURES
The information set forth above contains certain financial
information determined by methods other than in accordance with
GAAP. These non-GAAP financial measures are “tangible common
equity,” “tangible book value per common share,” “EBITDA,” “total
revenue,” “pre-tax, pre-provision net revenue” and “efficiency
ratio.” These non-GAAP financial measures are supplemental measures
that we believe provide management and our investors with a more
detailed understanding of our performance, although these measures
are not necessarily comparable to similar measures that may be
presented by other companies. These disclosures should not be
viewed as a substitute for financial measures in accordance with
GAAP. The non-GAAP financial measures presented herein are
calculated as follows:
“Tangible common equity” is defined as common shareholders’
equity reduced by intangible assets, including goodwill. We believe
this measure is important to management and investors so that they
can better understand and assess changes from period to period in
common shareholders’ equity exclusive of changes in intangible
assets associated with prior acquisitions. Intangible assets are
created when we buy businesses that add relationships and revenue
to our company. Intangible assets have the effect of increasing
both equity and assets, while not increasing our tangible equity or
tangible assets.
“Tangible book value per common share” is defined as common
shareholders’ equity reduced by intangible assets, including
goodwill, divided by common shares outstanding. We believe this
measure is important to many investors who are interested in
changes from period to period in book value per common share
exclusive of changes in intangible assets associated with prior
acquisitions.
“EBITDA” is defined as net income before interest expense,
income tax expense, depreciation expense and intangible
amortization expense. We use EBITDA particularly to assess the
strength of our investment management business. We believe this
measure is important because it allows management and investors to
better assess our investment management performance in relation to
our core operating earnings by excluding certain non-cash items and
the volatility that is associated with certain discrete items that
are unrelated to our core business.
“Total revenue” is defined as net interest income and total
non-interest income, excluding gains and losses on the sale and
call of debt securities. We believe adjustments made to our
operating revenue allow management and investors to better assess
our core operating revenue by removing the volatility that is
associated with certain items that are unrelated to our core
business.
“Pre-tax, pre-provision net revenue” is defined as net interest
income and non-interest income, excluding gains and losses on the
sale and call of debt securities and total non-interest expense. We
believe this measure is important because it allows management and
investors to better assess our performance in relation to our core
operating revenue, excluding the volatility that is associated with
provision for loan and lease losses and changes in our tax rates
and other items that are unrelated to our core business.
“Efficiency ratio” is defined as total non-interest expense
divided by our total revenue. We believe this measure allows
management and investors to better assess our operating expenses in
relation to our core operating revenue, particularly at the
Bank.
TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
September 30,
June 30,
September 30,
(Dollars in thousands, except per share
data)
2021
2021
2020
Tangible common equity and tangible
book value per common share:
Common shareholders’ equity
$
633,595
$
615,225
$
527,121
Less: goodwill and intangible assets
62,478
62,955
64,389
Tangible common equity (numerator)
$
571,117
$
552,270
$
462,732
Common shares outstanding
(denominator)
33,154,343
33,176,934
29,828,143
Tangible book value per common share
$
17.23
$
16.65
$
15.51
INVESTMENT MANAGEMENT SEGMENT NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands)
2021
2021
2020
2021
2020
Investment Management EBITDA:
Net income
$
1,677
$
1,196
$
719
$
3,898
$
1,633
Interest expense
—
—
—
—
—
Income tax expense
(412)
286
251
183
381
Depreciation expense
105
103
103
312
319
Intangible amortization expense
477
478
478
1,433
1,466
EBITDA
$
1,847
$
2,063
$
1,551
$
5,826
$
3,799
TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands)
2021
2021
2020
2021
2020
Total revenue and pre-tax,
pre-provision net revenue:
Net interest income
$
46,667
$
42,912
$
33,474
$
128,235
$
101,880
Total non-interest income
14,230
14,844
16,889
42,725
43,202
Less: net gain on the sale and call of
debt securities
33
98
3,744
130
3,815
Total revenue
$
60,864
$
57,658
$
46,619
$
170,830
$
141,267
Less: total non-interest expense
38,008
34,425
31,427
103,711
88,668
Pre-tax, pre-provision net revenue
$
22,856
$
23,233
$
15,192
$
67,119
$
52,599
BANK SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands)
2021
2021
2020
2021
2020
Bank total revenue:
Net interest income
$
48,114
$
44,356
$
34,925
$
132,623
$
104,241
Total non-interest income
4,801
5,381
8,771
14,813
19,708
Less: net gain on the sale and call of
debt securities
33
98
3,744
130
3,815
Bank total revenue
$
52,882
$
49,639
$
39,952
$
147,306
$
120,134
Bank efficiency ratio:
Total non-interest expense (numerator)
$
28,975
$
25,570
$
23,462
$
77,201
$
64,462
Bank total revenue (denominator)
$
52,882
$
49,639
$
39,952
$
147,306
$
120,134
Bank efficiency ratio
54.79
%
51.51
%
58.73
%
52.41
%
53.66
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211020006113/en/
MEDIA CONTACT Jack Horner 267-932-8760, ext. 302
412-600-2295 (mobile) jack@hornercom.com
INVESTOR RELATIONS CONTACT Lambert Jeff Schoenborn and
Kate Croft 888-609-8351 TSC@lambert.com
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